Item 1.01 Entry into a Material Definitive Agreement.
On January 1, 2021, Clarus Corporation (the "Company") entered into an
employment agreement with Mr. John Walbrecht (the "Walbrecht Employment
Agreement"), the Company's current President, which provides for Mr. Walbrecht's
continued employment as President of the Company for a term expiring on January
1, 2024, subject to certain termination rights, during which time he will
receive an annual base salary of $500,000.
Under the terms of the Walbrecht Employment Agreement, the Company issued and
granted to Mr. Walbrecht an option to purchase 400,000 shares of the Company's
common stock pursuant to the Company's 2015 Stock Incentive Plan (the "Plan"),
having an exercise price per share of $15.15 (because the date of grant was not
a trading day, the exercise price is equal to the closing price of the Company's
common stock on the immediately succeeding trading day, January 4, 2021), which
will vest and become exercisable as follows: (i) 133,334 shares on January 1,
2022, (ii) 133,333 shares on January 1, 2023, and (iii) 133,333 shares on
January 1, 2024.
In addition, at the sole and absolute discretion of the Company's Board of
Directors or the Compensation Committee of the Company's Board of Directors, Mr.
Walbrecht is entitled to receive annual performance bonuses, which may be based
upon a variety of qualitative and quantitative factors, of up to 50% of Mr.
Walbrecht's annual base salary. Mr. Walbrecht will also be entitled, at the sole
and absolute discretion of the Company's Board of Directors or the Compensation
Committee of the Company's Board of Directors, to participate in other bonus
plans of the Company.
The Walbrecht Employment Agreement also contains confidentiality obligations as
well as a non-competition covenant and non-interference (relating to the
Company's customers), non-solicitation (relating to the Company's employees) and
non-disparagement provisions effective during the term of his employment and for
a period of two years after the termination of his employment with the Company,
as more particularly set forth in the Walbrecht Employment Agreement.
In the event that Mr. Walbrecht's employment is terminated as a result of his
death or permanent disability, Mr. Walbrecht or his estate will, subject to the
provisions of the Walbrecht Employment Agreement, generally be entitled to
receive his accrued base salary through the date of such termination and earned
but unpaid annual incentive bonus pro rated for the portion of the year in which
such termination occurred. In addition, all granted but unvested stock options
and all unvested restricted stock shall immediately vest.
In the event that Mr. Walbrecht's employment is terminated by the Company for
"cause" (as defined in the Walbrecht Employment Agreement), Mr. Walbrecht will,
subject to the provisions of the Walbrecht Employment Agreement, generally be
entitled to receive his accrued base salary through the date of such
termination. In addition, all stock options, whether vested or unvested, and
granted but unvested restricted stock will be null and void, except that, in the
event that Mr. Walbrecht is terminated as a result of his failure to perform any
reasonable directive of the Company's Board of Directors, he will be entitled to
retain any vested stock options.
In the event that Mr. Walbrecht's employment is terminated by the Company
without "cause" (as defined in the Walbrecht Employment Agreement), Mr.
Walbrecht will, subject to the provisions of the Walbrecht Employment Agreement,
generally be entitled to receive an amount equal to one year of his base salary
and reimbursement of any COBRA premium payments made by Mr. Walbrecht during
such one-year period, in each case payable in accordance with the Company's
normal payroll practices; provided that Mr. Walbrecht executes a Separation
Agreement and General Release Agreement that is satisfactory to the Company. In
addition, all granted but unvested stock options and all unvested restricted
stock will immediately vest.
In the event that Mr. Walbrecht's employment is terminated by Mr. Walbrecht
other than as a result of a "change in control" (as defined in the Walbrecht
Employment Agreement), Mr. Walbrecht will, subject to the provisions of the
Walbrecht Employment Agreement, generally be entitled to receive his accrued
base salary and benefits through the date of such termination. In addition, all
granted but unvested stock options and all unvested restricted stock will be
null and void.
In the event that Mr. Walbrecht's employment is terminated by either party
within 30 days of a "change in control" (as defined in the Walbrecht Employment
Agreement), Mr. Walbrecht will, subject to the provisions of the Walbrecht
Employment Agreement, generally be entitled to receive an amount equal to one
year of his base salary payable in one lump sum within five business days after
such termination and reimbursement of any COBRA premium payments made by Mr.
Walbrecht during such one-year period; provided that Mr. Walbrecht executes a
Separation Agreement and General Release Agreement that is satisfactory to the
Company, and provided further that, in the event the Company or the acquiror
requests Mr. Walbrecht to provide consulting services described in the Walbrecht
Employment Agreement, then the lump sum payment of an amount equal to one year
of his base salary shall be payable upon the expiration of such consulting
period, and during such consulting period, Mr. Walbrecht will be entitled to a
consulting fee equal to what he would have otherwise been entitled to be paid
under the Walbrecht Employment Agreement during such period. In addition, all
granted but unvested stock options and all unvested restricted stock shall
immediately vest.
In the event that Mr. Walbrecht fails to comply with any of his obligations
under the Walbrecht Employment Agreement, including, without limitation, the
non-competition covenant and the non-interference, non-solicitation and
non-disparagement provisions, Mr. Walbrecht will be required to repay the one
year of base salary paid to him pursuant to the Company termination without
cause or change in control provisions of the Walbrecht Employment Agreement as
of the date of such failure to comply and he will have no further rights in or
to such payments payable to him pursuant to the Walbrecht Employment Agreement.
All payments and benefits provided under the Walbrecht Employment Agreement
shall be subject to any compensation recovery or clawback policy as required
under applicable law, rule or regulation or otherwise adopted by the Company
from time to time.
The Walbrecht Employment Agreement contains provisions designed to reduce (but
not below 0) any payments otherwise required to be paid to Mr. Walbrecht if the
same would result in the imposition of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), to the minimum extent
necessary so that such excise tax is not imposed. The Walbrecht Employment
Agreement also contains provisions intended to comply with Section 409A of the
Code.
The foregoing description of the Walbrecht Employment Agreement does not purport
to be complete and is qualified in its entirety by reference to the Walbrecht
Employment Agreement, which is included as Exhibit 10.1, to this Current Report
on Form 8-K (the "Report") and incorporated herein by reference.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers.
(e) The disclosure set forth in Item 1.01 of this Report with respect to Mr.
Walbrecht is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits. The following Exhibit is filed herewith as a part of this
Report:
Exhibit Description
10.1 Employment Agreement, dated as of January 1, 2021, between Clarus
Corporation and John Walbrecht.
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